Credit Acceptance said it ended the latest period with a first-quarter loss of $7.8 million, compared with net income of $116.0 million a year earlier, as the company increased spending on technology and pricing discipline continued to pressure volume.
The company’s pretax income fell to $1.0 million from $151.4 million in the prior-year quarter. Revenue declined to $490.6 million from $531.8 million.
Operating metrics also moved lower. Contract purchases were $1.16 billion, down from $1.29 billion a year ago. Consumer loan assignments fell to 50,737 from 57,058. Average amount financed per contract slipped to $21,066 from $21,780.
The company said it had 3,126 active dealers at quarter-end, down from 3,214 in the prior year. Managed receivables rose to $8.75 billion from $8.46 billion, while the allowance for credit losses increased to $1.20 billion from $1.10 billion.
Servicing and collection performance weakened modestly. The annualized net charge-off rate rose to 7.5% from 7.0%, and the percentage of loans 30 days or more past due increased to 4.9% from 4.6%.
On the expense side, salaries and wages climbed to $54.6 million from $46.5 million, and technology-related spending increased to $24.4 million from $18.8 million. Total operating expenses rose to $489.6 million from $380.4 million.
Cash and investments at quarter-end were $1.08 billion, up from $929.7 million a year earlier. Debt outstanding increased to $4.54 billion from $4.20 billion. As a result of these announcements, the company's shares have moved -0.24% on the market, and are now trading at a price of $442.845. Check out the company's full 8-K submission here.
